Sales and Distribution
Management
What we discussed so far..
• Sales Forecasting
• Segmentation
• Manpower dimensioning – Good morning cereal
• Sales Territory design
Steps to the right sales strategy-
Value Creating a
Segmentation
proposition Sales Process
On a continuum….
MASS MARKET SEGMENTED MARKET MICRO MARKET INDIVIDUAL CUSTOMER
WHAT IS THE RIGHT SALES STRATEGY FOR EACH MARKET?
Why do customers buy?
• A product offered at low price.
• A product that offers higher benefits than price paid for. ( high
perceived value)
FOR A SELLER
LOWEST HIGHEST
RS /UNIT RS /UNIT
PERCEIVE
COST PRICE
D VALUE
SALES PROCESS-
Todays Coverage
• Go to market
• Sales force Structure
• Sales Force Performance
• Discussion of New age computers I and II
Go to market strategy
It’s the Judicious mix of
• Company salesperson
• Distributor
• Company Website
• 3rd party websites
• Agency
• TeleSales
• Retail outlets
To serve a particular market segment
A major software seller
MARKET SALES CHANNEL SERVICE CHANNEL
GOVERNMENT MARKET GOVERNMENT SELLING EXPERTS COMMON
TECHNOLOGY
BANKING AND FINANCIAL SERVICES BFSI SELLING EXPERTS SUPPORT TEAM
OIL AND NATURAL GAS OIL MARKET EXPERTS
A BANK
MARKET/TASK LEAD GENERATION QUALIFICATION PRE-SALES SALES CLOSING FULFILMENT
/SUPPORT
MORTGAGES ONLINE TELESALES SALES EXECUTIVES DEDICATED LOAN
BRANCHES SALES EXECUTIVE SUPPORT TEAM
REAL ESTATE
BROKER
BUILDERS
CREDIT CARD ONLINE TELESALES SALES EXECUTIVES AUTOMATED CC SUPPORT TEAM
ATM PROCESS
BRANCH
Amazon
MARKET/TASK INTEREST CREATION SALES CLOSING FULFILMENT/SUPPORT
ONLINE BUYER BUYER WEBSITE WEBSITE SUPPORT TEAM
ONLINE ADVERTISING MOBILE APP
TELESUPPORT
EMAIL
Go to market- Big bazaar and amazon
MARKET/TASK INTEREST SALES CLOSING FULFILMENT/SUPP
CREATION ORT
VALUE BUYER STREET ACTIVITY AT THE SHOP SUPPORT TEAM
ADVERTISING MOBILE APP
MOBILE APP
MARKET/TASK INTEREST CREATION SALES CLOSING FULFILMENT/SUPPORT
ONLINE BUYER BUYER WEBSITE WEBSITE SUPPORT TEAM
ONLINE ADVERTISING MOBILE APP
TELESUPPORT
EMAIL
PERFORMANCE OF CHANNELS BY
Activity/Channel OWN TEAM ACTIVITY
DISTRIBUTOR RETAIL TELESALES WEB/MOBILE
ASSESSING NEEDS HIGH HIGH LOW MODERATE – LOW
TEMPLATE
COMPLEX HIGH MODERATE LOW LOW VERY LOW
MESSAGE
SELF SERVICE LOW LOW HIGH LOW HIGH
LOCATION LOW HIGH HIGH NO MODERATE
24/7 AVAILABILITY LOW LOW MODERATE LOW HIGH
INFORMATION HIGH MODERATE LOW MODERATE HIGH
AVAILABILITY
RELATIONSHIP HIGH HIGH MODERATE MODERATE LOW
FOCUS
LOW PRICE LOW LOW MODERATE HIGH HIGH
Efficiency and effectiveness
LOW COST ADVERTISING
MESSAGING
INTERNET
TELESALES
DSA
OWN SALES FORCE
HIGH COST
PER MESSAGE KEY ACCOUNT OR
TECHNICAL SALES
LOW SALE EFFECTIVENESS HIGH SALE
PER ACTIVITY PER ACTIVITY
Sales force structure
Sales force structure, size and tasks
• Type of sales force task specialisation
• Roles of the team members
• Who reports to whom
• Control of the team and monitoring
• Number of people at each level of the team
• Matching sales team and customers ( setting the territory)
Sales force Specialization
• Generalist – Selling the entire range of HUL products
• Market Based- Education / Oil and Gas/ Retail ( consulting company)
• Product based- Cardiology/ Oncology or Finacle sales team or post
paid team
• Activity based- Pre sales consultant, Telesales,
Types of reporting structures- Geographic
NATIONAL
SALES HEAD
SALES HEAD SALES HEAD SALES HEAD
NORTH WEST SOUTH
CITY MANAGER
- DELHI
SALES PEOPLE
Type of reporting- Product units
National sales
head
Head Head-
-Product Product line-2
Area head
Account
Executives
Control of the team
Type of resource New sales people High performers Medium performers Low performers
Number of resources 20 20 40 20
Time to be spent with 2 days 1 day 3 days 2.5 days
resource in a month
Total time needed to 40 days 20 days 120 days 50 days
be spent in a month
230 days to be spent
A sales manager is available for 22 days in a month so, we need 230/22.
So we need ~11 sales managers to run the team
Performance monitoring
What to do?
Ravi is a great salesperson when it comes to small accounts. He “owns”
the customers.
However, when he is facing a large account needing a solution
approach, he is losing out. He does not trust others in the company to
“help” him out…..
Performance is not matching. What to do??
What to do?
Kumar is having serious personal issues. He is not able to focus on
work.
What to do?
Amrit is doing his numbers every month. However, you are noticing
that his expense account is 0.75 times his monthly salary and he is
poaching customers from other territories.
Performance management
• The bridge between the salesperson and the activities he needs to do
to succeed.
• Answer to the question- What activities should I do to get a
customer? And What will lead me to meet the revenue target?
• Needs to be articulated clearly so that everyone understands
PERFORMANCE MANAGEMENT PROCESS
Setting goals
Evaluation &
Plans
reward
REGULAR
FEEDBACK
Measuremen
Actions
t
PERFORMANCE MANAGEMENT PROCESS 5 Crore
DSA 40% business
Fair in business
2 Crore big, 3crore
target ( topline)
small clients
Good in process
Add 3 new DSA
( DSA)
4 Crore target met DSA & Customer
4 DSA added meetings
A formal PMS
• Sitting with the sale person
• Coaching the salesperson
• Improve the performance by reminding the salesperson of the sales
process
• Lets go to the article
How to evaluate the salesperson
High High 3 4
3 4 Sales
Growth
Attitude 2 1 2
1 Low
Low
Low Low High
High
Skill QUAL Target Achieved
QUAL/QUANT 1 2 3 4
1 SACK IMPROVE TRAIN SELF
Better territory DEVELOPMENT
TRAINING
2 IMPROVE - TRAIN COACH COACH ON
QUANT Better the skill ATTITUDE
3 TRAIN TRAIN COACH REWARD
4 TRAIN ON COACH ON SALES REWARD REWARD AND
SELLING SKILLS SKILLS RETENTION
Evaluating using the Compentencies
Competencies Basic level Experienced Advanced level
Product knowledge
Sales process
Relationship management
Territory management
Evaluating using score card
Score card parameters Indicators
Financial Meeting sales target and cross-sell target
Process Within TAT, appointment of channel partner
Customer Customer complaint handling,
Learning Sales training, process training
Ratings
Parameter/ Very Poor Poor Average Good Very Good
Rating 1 2 3 4 5
Topline
Cross sell
Selling Skills
Loyalty
Customer focus
Willingness to
implement new
methods
Sales Trainings
A curve to remember
Alternative approaches
• Continuous feedback
• Open ranking ( Compare against target achievement)
• Behavioral Diary
Sales Performance
Measures and designing
an incentive plan
Set KPIs and MOnitor
Discussion Flow
What are we targeting
Lead measures
Process Measures
Result Measures
Externalities
Sales Performance
Measures
ROLE OF SALES MANAGER
Industry Key role of Sales Manager Deliverable Additional Role Support functions
Trial, sampling, below
Re-distribution and the line brand promotion
FMCG Availability and display Marketing
Merchandising Billing to distributors
Distributor ROI
Customer service for
Address
Telecom Identify prospect, present, Verfication(AV)/
Postpaid detail and convert Sales Credit Verfication (CV),
activation, data entry
and service
Second Recharge by
Re-distribution and customer
Telecom Customer Service
Prepaid Merchandising; below the Availability and display Billing to and collection Marketing
line brand promotion from distributor
Distributor ROI
Office Key Account Management, Revenue, Sales Billing and collection
Automation Demonstrate and convert
Conversion of walk-in
Consumer Stock merchandising, enquiries Manage Billing and collection Installation and service
deals, Counter salesman
Durable franchisee to achieve Franchisee profit/ ROI team
training, targets,
45
Performance Evaluation
Performance Measures
Input Measures ( Effort)
Process Measures ( Methods)
Output Measures ( Results)
Externalities
In
distribution
context
Input Measures- Distribution Context
Input Measures
Number of calls
Productive calls
Sales Promotion activity conducted
Training of company SE
Training of Distributor DSE
Distribution Vacant territories– time taken to fill Target Vs actual
Distributors Appointed Vs planned
Process Measures Distribution Context
Process Measures
Numerical Distribution %
Presence in key outlets %
Distributor ROI Target Vs achieved
New Outlets opened Vs Target
Sales Promotional activities conducted Vs planned
Training/ Monitoring of Merchandiser/ Sales Promoter
Sampling done
Outlet-wise merchandising score– Target Vs actual
Activity plan for Organised--- Planned vs actual
Result Measures- Distribution
Result Measures
Primary sales achieved Vs. Target
Secondary sales achieved Vs. Target
Sales per SE
Sales Growth
Market share– from sample retail audit. Change over previous
period
Secondary Sales Target Vs achievement
Distribution Reach– Numerical and weighted %
Cost related
Selling expenses
Selling expenses as a ratio of Sales
Selling expenses as a ratio of calls
In direct
selling
context
Input Measures- Direct Selling Context
Input Measures
Number of calls
Leads Generated
Leads Converted
Number of repeat calls
Average call duration
Average time/Calls to Close
Product and technical knowledge
Process Measures- Direct Sales Context
Process Measures
Sales related
Account planning
Work Planning
Organised sales kit
Detailing in a structured manner
Promoting the product relevant to customer
Creating opportunities for selling high margin products
Cross selling
Using the right selling aids
Customer related
Relationship
Service/after sales service
Problem solving
Cost/expense related
Travel planning
Result Measures- Direct Sales
Result Measures
Sales Vs target
Sales per company SE
Sales per DSA SE
Sales Growth
Market share
Sales corresponding to BPI of territory
Sales per Promo Rs Spent
Gross Margin generated
Active accounts
Repeat accounts
Product Penetration into account
Cost related
Selling expenses
Selling expenses as a ratio of Sales
Selling expenses as a ratio of calls
Impact factors–
Other than Salesperson’s competence and application
Size of the territory
Number of accounts in the territory
Potential of the market
Competition index in that territory
Cumulative equity and pull for the brand/product in the territory
Past developmental efforts
Ad/promo activities/spends
Customer Satisfaction
Sales Techniques: Focus on process
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Sales Performance Measure
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Need to link INPUT-Process-Output performance measures
58
Designing an incentive
plan
Design Parameters
Simplicity
Transparency
Consistency
Equity
Flexible
Motivating
Rewarding higher order effort
Measure variables in control
Emphasise Hygiene variables
Include methods and effort in assessment
Crafting an incentive plan
Method-1 Composite Target method
Use contribution or long business priority to create relative
weightage for each product
Create weightage for each KPI
Convert the weightage to points with minimum for disqualification
or ceiling beyond which additional performance will not count
Provide accelerator points for over achievement on desired
parameter, if required
Create a composite score
Crafting an incentive plan
Method-2 Create independent targets and incentive for each set of
KPI
Sales KPI and incentive
Collection and cheque bounce KPI and incentive
Qualitative target KPI and incentive
Crafting an incentive plan
Method-3 Flexi target based on relative performance
Target based incentive at a base level Plus
Top X% will win incentive Plus
Company achievement incentive for all sales executives
Crafting an incentive plan
Method-4 Quarterly incentive and bonus annual incentive
To ensure dynamic trends are factored
Crafting an incentive plan
Method-5 Competition benchmarked flexing of targets
Limitation: Can work at a national/ regional level and not at a local
level
New age computers -1
New age computers -2
The end
